Baker pushes health cost controls

Gov. Charlie Baker launched the beginning of what promises to be a very interesting debate about how to rein in the cost of health care in Massachusetts, releasing an internal planning document calling for assessments on employers who don’t offer their workers health insurance and caps on the rates health providers can charge for their services.

According to the document, the goal of Baker’s initiative is to curb the flow of workers from the commercial insurance market to MassHealth, the state’s health insurance program for the poor and disabled. According to a letter Baker sent to congressional leaders last week, the percent of residents on commercial insurance has fallen by 7 percentage points since 2012 while the percent on MassHealth, or Medicaid, has risen by 7 points. Medicaid, jointly funded by the state and federal government, now covers 28 percent of the state’s population and accounts for just under 40 percent of the state’s budget.

Baker administration officials say the assessments on employers and the rate caps, along with other measures outlined in the planning document, would hold the increase in Medicaid spending to 2 percent in the fiscal year beginning July 1.

The employer assessments, expected to be $2,000 per employee, would raise an estimated $300 million. The assessments would apply to businesses that don’t cover at least 80 percent of their workers and fail to absorb 60 percent of the premium cost.

Details about the proposed rate caps were sketchy. Baker administration officials, however, said the caps would not apply to primary care and behavioral health and would likely be set by the Division of Insurance.

Baker’s proposals are expected to be contained in his budget proposal for fiscal 2018, which is due to be filed January 25.

The proposals are surfacing as a new report commissioned by the Massachusetts Association of Health Plans and backed by three business groups calls for rate caps to help eliminate the price disparities between high-cost and low-cost health providers. The study indicated higher-priced hospitals in Massachusetts charge 2.5 to 3.4 times more than lower-priced hospitals for the same services.

Lynn Nicholas, the president of the Massachusetts Health & Hospital Association, said the report was based on misleading data. “It’s completely erroneous,” she said.



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